The topic on personal finance is quite broad but we should know the basics in order for us to understand it better and to have control over our finances. There are four elements that we should consider when it comes to personal finance and these are: Security, Stability, Growth and Protection and Management.
The first one which is security means that you are prepared when something unexpected happens. These are the funds that you have that can protect you or assure you that you will get by when something unfortunate occurs. Obtaining life insurance is important so that your family can be secured when something happens to you. Health, disability, home and auto insurance can provide additional protection in their respective areas. Make sure that you keep the policy and you keep a record of your agents and their phone numbers.
The next one is stability. This simply means that you live within your means. It is important that you do not go over your monthly budget. Keeping track of your expenditure will help you know how much you are spending every month and this will let you see on where you can cut on certain expenses so that you can be on budget every month. Another form of stability is trying to get rid of debt but debt itself is stability. You have to make those payments until it is paid off. The important thing is to not loan items which you can pay for. Using credit cards and having a loan can really build your credit but it is either your make it or you break it. So make sure that you can pay your loans on time.
After you are secure and stable, you will have growth. This means you have to build your nest egg or your wealth. Do not rely solely on your Social Security or your 401k. You can invest your money in the stock market but make sure that you learn about this intensively before investing your funds.
The last one is protection and management. With any significant wealth or asset, you will want to put away this asset upon your death. You can actually do this by consulting an attorney where he can create a trust for you. You can pass this trust to anyone you name on the will, may it be your children, your favorite charity or the local church.